A report released Tuesday by Ceres Insurance Program analyzed 193 P&C insurers and found that a startlingly small number were changing their business models to accommodate for future climate change problems.

Only 4% of insurers had an overall leading rating in the survey, and 20% received a “developing” rating, showing that the majority of P&C insurers are not addressing climate change and the associated risks, according to the report.

Only 13 insurers had a climate review expert who would report to senior level members best corporate practices by monitoring climate risks and strategies, and only 5% of companies were leading in keeping clients engaged through communication and tech tools to help evaluate their risk, according to the report.

What steps do insurers need to take now? Click through the following pages to find out.

Develop Oversight at the Senior Level

In order to address the long-term risks involved with climate change, insurance company leaders need to understand the problems they face, especially at the senior board and C-suite levels. They will need to align their company policies with the risks that climate change pose on their business and be able to react accordingly in the event of a catastrophe.

Tell Your Stakeholders What Your Position Is

Because P&C insurers absorb most of the financial impacts from climate change, your company should have a public and comprehensive corporate policy on climate risk management available to shareholders, policyholders and employees. Your policy should outline the company’s understanding of climate science, greenhouse gas reduction goals, how much climate change plays a part in underwriting management and your company’s goals and commitments to fighting climate change.

Improve Foresight on Climate Risks

Catastrophe modeling has been one of the primary risk management tools for P&C insurers, but large-scale climate projection software and underwriting data can also help in pricing and assist insurers in creating loss data. If the tools aren’t readily available for your company, try working with public officials to develop those tools.

Engage With Your Stakeholders

Communicate with your policyholders and shareholders on increasing their own resilience against climate change. Advocate for investment in public infrastructure, educate your policyholders and promote “climate-smart” products.

Disclose Everything

Being transparent is one of the keys to earning trust from the public and your stakeholders. Disclose your practices to regulators and use it to see how your company’s management stacks up against others.

Special Reports /

You won't believe how far behind the P&C insurance industry is on climate change

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